One of the models of long range gene activation hypothesizes that facilitator proteins might function to link enhancers to distant genes. Chip encodes a widely expressed candidate enhancer facilitator in Drosophila that is homologous to human NLI but no role for this protein in long range interaction has been demonstrated. We found that a complex of proteins including NLI, GATA-1, SCL and Lmo2 binds in vivo to the beta-globin LCR in erythroid cells. The C-terminal LIM interaction domain of NLI was required for formation of the complex on chromatin and absent this domain NLI functioned as a dominant negative inhibitor of globin gene expression. Knock down of NLI using shRNA in mouse erythroleukemia cells resulted in failure to activate beta-globin transcription after induction by DMSO. The NLI complex was present at the LCR in these cells and kinetic studies showed that after induction of transcription the NLI complex could be detected at the gene promoter. The new associations coincided with formation of a loop between the LCR and gene anchored by NLI. These studies uncovered a positive role for the NLI complex in beta-globin gene regulation and provided evidence that chromatin looping is facilitated by NLI. Additional sites of NLI interaction with chromatin discovered using genomics approaches are under investigation.[unreadable] [unreadable] Insulators are DNA elements that are proposed to block enhancer activity on a gene when placed between the two elements but the mechanism underlying this effect is unknown. We tested insulator function of the upstream border of the human globin locus, 5HS5, using transgenic mice carrying either (1) a wild type human globin locus, (2) a locus with an ectopic copy of HS5 between the LCR and the globin genes or (3) with a mutated HS5 to which the insulator factor CTCF can no longer bind. Beta-globin gene expression in mouse erythroid tissues was strongly reduced in HS5 mice and was restored after deletion of the CTCF site (HS5D). We determined, using chromatin immunoprecipitation, that in fetal and adult erythroid tissues of HS5 mice, pol II occupancy at the beta-globin promoter and histone acetylation, typically elevated near active genes, were diminished. In HS5D mice, pol II occupancy and histone acetylation were restored. Moreover, the histone acetyltransferase CBP was recruited normally to the beta-globin promoter of WT and HS5D mice but not in HS5 mice. CBP interacts physically with the erythroid trans-activator NF-E2. We found a remarkable reduction of NF-E2 at the beta-globin promoter in HS5 mice but not in HS5D mice. The CTCF dependent effects of HS5 on epigenetic modification and factor recruitment at the beta-globin gene show that HS5 has portable enhancer blocking activity. Strikingly, HS5 interfered with chromatin looping between LCR and -globin gene. The hypothesis that ectopic HS5 functions as a chromosomal tether is currently under investigation.